A Payable on Death account or POD is an account that instructs the financial institution to pass the assets to the named beneficiary. This means that money in the POD account is kept out of the course if the account holder dies.
There’s a saying that death and taxes are the two things fixed in the universe. When it comes to your banking accounts, it’s wise to add a beneficiary to help keep your accounts out of probate if you meet your untimely demise.
What are Pay-on-Death Accounts
A payable on death account or POD account is just the name given to accounts that have a named beneficiary. When you name a POD beneficiary, you do not give up control or ownership of your bank account. The POD beneficiary cannot withdraw or deposit money into your account. The beneficiary is not entitled to receive correspondence or financial statements.
Upon your death, the ownership of the accounts will automatically pass from you to your named beneficiary directly bypassing probate or courts. Your beneficiary will have immediate access to the funds in the account.
Why are PODs Important
In most circumstances, the money in your banking accounts becomes part of your estate when you die. However, with POD accounts it bypasses the estate and probate process.
To claim the money, a beneficiary simply has to visit the financial institution that has your accounts, prove their identity, and produce a certified copy of the account holder’s death certificate.
How to Add a Payable on Death Beneficiary
Your credit union or bank will add your beneficiary to your accounts after you’ve completed the necessary paperwork. It may be required to fill out multiple forms if you have more than one account with the financial institution.
For instance, you’ll need to name a beneficiary for your checking account AND for your savings account. And you can also name different beneficiaries.
Do the following:
- Visit your bank or credit union or call the customer service number to inquire about the specifics of adding a POD.
- Add a beneficiary to your banking account by providing the beneficiary’s social security number and date of birth to your bank.
- Have your valid photo ID and account information. Your beneficiary does not need to be present.
- Complete any necessary forms and sign the documents.
- You can make an existing account POD or open a new account and designate as a POD.
Remember to inform the POD of their status on your accounts and where to find information in case of your passing.
How Can a POD Beneficiary Access Accounts After a Death
Your beneficiary must contact the bank or credit union and present a death certificate and valid identification to have the funds released to them.